Shakeout looms for China’s electric car market, as 80 per cent of start-ups predicted to go under
- Only 20 to 30 electric vehicle makers may survive, says Beijing Electric Vehicle Co senior executive
- There were 486 EV manufacturers in China as of March, more than triple the number two years ago
China’s electric vehicle (EV) market is so overcrowded it is starting to resemble the dot-com bubble that burst at the turn of the century, the industry’s top producer warned, sounding the latest alarm for a market stacked with about 500 players.
There are many similarities between China’s EV market today and the crash two decades ago, when all kinds of random companies sought to become internet success stories, Lian Qingfeng, executive vice- president at Beijing Electric Vehicle Co (BJEV), said at the company’s headquarters in the Chinese capital on Wednesday.
As many as 80 per cent of the current start-ups could disappear, with a big shakeout coming within a couple of years, he said.
For years, generous government policies and ample funding turned China into a mecca for entrepreneurs seeking to become the next Elon Musk, transforming the country into the world’s largest market for battery-powered vehicles – by a large margin.
But as the government begins to pull back on handouts and traditional carmakers get serious about making electric cars, pressure is building on many of these start-ups to come up with sustainable business plans.